Implement Financial Management Approaches

IMPLEMENT FINANCIAL MANAGEMENT APPROACHES

DISSEMINATE RELEVANT DETAILS OF THE AGREED BUDGET/FINANCIAL PLANS TO TEAM MEMBERS

COMMUNICATE THE BENEFITS OF COST CONTROL

Engaging staff members on the benefits of cost control depends highly upon the existing rapport and camaraderie of teams and the nature of the measures of cost control themselves.

Cost control measures that are perceived as inconvenient, unnecessary or petty are likely to be more negatively received by staff particularly if they have not been consulted throughout the process of developing potential avenues for cost control. When this occurs, staff members commonly feel disregarded and taken advantage of.

Businesses that effectively implement cost control measures consider their teams both during the development phase of measures and when deciding upon the most appropriate measures to implement.

They ensure:

• Staff are part of the stakeholder group consulted when developing cost control strategies
• They have a voice in deciding which cost control measures are most appropriate and most achievable in their context
• They are part of the discussion setting cost control targets and timeframes

Taking this approach significantly increases the likelihood of uncovering concerns and resistance prior to launching a cost control strategy and increases the likelihood of engagement and commitment to the goals.

Staff members who have been part of the process are invested in the outcomes and are more commonly positive about any additional discretionary effort that may be required to achieve the desired outcomes. The win is then theirs and becomes an increase in team cohesiveness.

INSPIRE INDIVIDUAL ACCOUNTABILITY 

All change occurs in the individual first. It is for this reason that winning the hearts and minds of individual staff is necessary when attempting to inspire any change in behaviour is teams. 

Ideally, managers should be aware of the relative enthusiasm and influence of their individual team members and take steps to involve and inspire those individuals that are naturally highly influential over other team members. 

Their involvement, endorsement, support and enthusiasm for any initiative, particularly ones that may be perceived as slightly undesirable or inconvenient will do far to ensuring comprehensive team buy-in.

It is possible to get creative and implement motivational strategies such as individual and team incentives that act as drivers of change. Remembering most cost control measures require a change in some form from individuals and teams, incentives may be beneficial is resistance is high.

However, it is always preferred to engage the hearts and minds of people through inspiration rather than reward as the use of a reward increases the likelihood of the new desired behaviour being anchored to reward, when the reward is removed as it will be over time the behaviour goes back to normal.           

PROVIDE SUPPORT TO ENSURE THAT TEAM MEMBERS CAN COMPETENTLY PERFORM REQUIRED ROLES ASSOCIATED WITH THE MANAGEMENT OF FINANCES

DEVELOP FEEDBACK MECHANISMS TO ACTION RECOMMENDATIONS

When consulting with teams to work on the development of cost control measures it is necessary to embed methods of feedback to action recommendations for improvement.

When significant cost cutting measures are required or the business runs multiple locations, consultation can occur over geography and time. Ensuring key suggestions and recommendations get back to the key decision makers allows businesses to take advantage of and endorse cost control opportunities that may differ across the business.

It is important that each is considered, modified as required, and endorsed in a timely fashion so teams can implement their ideas while the momentum is still with them.

Having a long drawn out approval process can result in teams losing their excitement and enthusiasm for initiatives they have devised and the opportunity to maximise cost control via that means may be diminished. 

Businesses can ensure a streamlined feedback mechanism by creating a formal ideas process that outlines the format ideas should be communicated in and the lines of communication they should follow.

To illustrate, 

A large business with multiple sites may implement a cost control initiative and canvas teams for ideas. 

They may stipulate that ideas must be shared with direct management outlining the idea, how it is to be implemented and any potential barriers by a given date.

The process need not be complex. However, it must be clear and include a description of how recommendations will be considered and feedback forwarded to those making the recommendations.

DETERMINE AND ACCESS RESOURCES AND SYSTEMS TO MANAGE FINANCIAL MANAGEMENT PROCESSES WITHIN THE WORK TEAM

Financial management deals with the planning and overseeing of an organisation’s financial resources. This includes planning, organising, directing and monitoring, of finances in ways that are beneficial to the company in order to reach the company’s resources in efficient and productive ways to achieve organisational objectives. To do this, the organisation must ensure employees have access to the necessary resources, to perform their functions efficiently and effectively.

The budget recognises resources and systems available, which include sufficient qualified staff, electronic management systems, secure record-keeping procedures, well-maintained equipment, adequate available funds and adequate time to meet deadlines. Management needs to ensure the availability of these resources, and that they are used efficiently in order to manage the organisation’s financial processes.

As well as the management of the budget, management also needs to oversee the responsibilities and financial activities of team members such as purchasing, payroll and banking.

HUMAN RESOURCES

There needs to adequate staff numbers in order to cope with the numerous financial tasks and responsibilities within your team such as, debt collection, handling the petty cash system, purchasing and so on, as well as the other team-specific tasks such as sales, marketing, administration and so on.  Additional staff may be necessary if you believe understaffing is an issue. Staff numbers required should be identified when planning the team’s budget. Outsourcing and contracting of extra staff may be necessary in order to meet your budget, or look more closely at the structure of the team and monitor the effectiveness of full-time, part-time and casual employees.

Team members also need the appropriate training to carry out their duties effectively. The efficiency with which team members perform should be regularly monitored identify any skills or knowledge deficiencies and plans structured to address them as appropriate. Poorly trained staff can make meeting team and organisational goals within the allocated budget difficult.

PHYSICAL RESOURCES

Managing finances effectively means that a manager needs to make sure their team has the physical resources required to work efficiently and productively. This may include office or useable space, office supplies, furniture, storage, computers and machinery, all of which must be maintained and in good working order.

Identification of appropriate and cost-effective physical resources is an integral component of budget planning, so ensure the needs of the team have been determined precisely. It may be that leasing or hiring equipment is more economically feasible, or purchasing second-hand goods are more cost-effective than new. Organisational purchasing or procurement policies should be followed, practices and procedures monitored, and report on physical resources and asset life expectancy. This ensures that finances allocated to these items are well managed. Poorly managed equipment may lead to increased breakdowns and loss of time and money.

TIME

Time management an essential skill used to ensure that time is used effectively and not wasted on performing irrelevant tasks which could be delegated to others. Delegation of tasks to the wrong person can be excessively time-consuming. As a manager, one needs   to set deadlines, delegate authority, streamline procedures and communicate expectations and requirements through appropriate channels in a time efficient manner. Following up on deliverables from others and training your staff to carry out their responsibilities efficiently are vital. Make sure staff tell you if timelines are not being met as this impacts on your budget, and contingency plans may need to be implemented in order to restore designated time frames.